State budget a mixed bag for land conservation efforts

Wednesday

Jul 31, 2013 at 3:00 AM

The $20.6 billion state budget signed Friday by Gov. Pat McCrory improved on earlier versions in terms of funding land preservation in the mountains, conservationists said Tuesday, but it also nixed three important tools for protecting farms, forests and rivers.

By Nathaniel AxtellTimes-News Staff Writer

The $20.6 billion state budget signed Friday by Gov. Pat McCrory improved on earlier versions in terms of funding land preservation in the mountains, conservationists said Tuesday, but it also nixed three important tools for protecting farms, forests and rivers.As part of its budget reforms, the legislature eliminated a state income tax credit for landowners who donate land or easements for conservation, a state trust fund that has helped protect local wetlands and parklands, and a deed stamp tax that contributed to local land protection efforts. Removing the tax credit for landowners takes away an “important incentive” that land trusts have used to preserve mountain farms, forests and watersheds, said Kieran Roe, executive director of Carolina Mountain Land Conservancy.“I'm sure it will impact our work, moving into the future,” he said. “For some people, the main motivation is knowing that their land is going to be conserved — the tax benefits are a very small part of their decision-making. But for other landowners, the incentives have been an important part of their decision-making.”The loss of conservation tax credits will sting the most when it comes to appealing to a family with a “mix of opinions about the wisdom of conservation,” Roe said, or a person who owns land of high conservation value that is being purchased for less than its appraised value.“When these financial incentives are available, it can make a defining difference in a family's decision to go with a conservation easement,” he said. Tax credits also help if state or federal grants are being used to compensate a landowner for a “bargain sale” in the name of preservation, Roe added. “The difference between what an appraiser would say is the fair market value and what the owner sells it for, that is also considered a charitable contribution,” he said. “And so those gifts will also be impacted by the elimination of the state tax credit.”Roe said North Carolina was a “pioneer” nationally in granting tax credits to landowners for conservation purposes. Over the years, he said, “the state has received a great deal more in the value of the land that has been conserved than they have given up in tax credits.”The current tax credit, which expires Dec. 31, is worth 25 percent of the fair market value of a landowners' donation, up to $250,000 for individuals and $500,000 for corporations. Federal tax credits for easements and land donations still exist, Roe pointed out, but those also face curtailment by deficit hawks in Congress. In their final budget, N.C. lawmakers also scratched the state's Natural Heritage Trust Fund and merged its operations with the Clean Water Management Trust Fund, giving it $12 million for the next two fiscal years. That was better than the $4 million annual cap the House had proposed for the trust fund, which has contributed more than $40 million since 1996 toward the purchase of conservation lands in Henderson and Transylvania counties, including parts of Chimney Rock and Gorges state parks, DuPont State Recreational Forest and the Green River gamelands. Although the clean water trust fund alone received annual appropriations of $84 million to $100 million between 2005 and 2008, the General Assembly had gradually cut it to roughly $50 million by fiscal year 2010-11. Republicans reduced it to $11.2 million after they took over the General Assembly — and a state financial crisis — in 2011-12.The $12 million budgeted this year not only betters that, it's actually an improvement in other ways, said Debbie Crane, a spokeswoman for Land for Tomorrow, a Raleigh-based coalition of land trusts.Since around 2008, Crane said roughly a third of the trust fund's annual appropriation was used to pay down bond debt and another third had to pay for upgrades to wastewater treatment plants. Once those were removed, she said, “you only had about $3 million for actual land acquisitions.”Moreover, Crane said, the trust fund hasn't been a recurring appropriation for the last five years. The new state budget changes that through 2014-15. “So the Clean Water Trust Fund is in much better shape because you've got $10 million that's totally for conservation, there's no debt service and we don't have to go fight for it next year,” Crane said. As part of their tax reforms, lawmakers also eliminated a deed stamp tax, which was collected when property is transferred between owners. Previously, about 25 percent of the state's portion of the tax went to the Natural Heritage Trust Fund, contributing more than $171 million toward conservation since 1987. Locally, the Natural Heritage Trust Fund has helped purchase parts of the Ochlawaha Bog, Hickory Nut Gorge and DuPont State Recreational Forest. Reach Axtell at 828-694-7860 or than.axtell@blueridgenow.com.